Impact of FDI on Insurance Sector

Abstract

FDI (Foreign Direct Investment) in Insurance sector inculcates the saving habits, which in turn generates long term ingestible funds for infrastructure. India is no doubt a growth economy and many consider it as an attractive country to invest in, particularly in its rapidly growing and changing insurance market. After a decade of strong growth, Indian insurance industry is facing severe headwinds owing to slow growth, rising costs, stalled reforms, worsening distribution structure. FDI is a better alternate to reduce such problems. So government of India has taken liberalized steps by lowering trade barriers and removing certain restrictions. Government has raised FDI in insurance sector from 26% to 49%. This increment in FDI has two sided effects on our Indian economy.